2 min read

πŸ‘Ύ Ethereum Proof of Stake Merge Thoughts

Well guys, it finally happened - ETH merged to proof of stake

Time to pay out the believers

Wanted to do a thought dump on ETH "2.0" this week for posterity and provide some of my favorite charts and tweets from this long and crazy ride

How Did We Get Here?

Marty Bent has kept up a thorough Twitter thread since 2017 (back when Nassim Taleb was still Bitcoin positive/agnostic and maximalists cited his work)

Beginning of the tweet thread 2017
End of the tweet thread 2022

The thread lasted over 5 years and it's worth going through to see how many promises were kept and broken along the way if you haven't seen it before

Bullish - ETH Dev Team

I think overall the merge going off (mostly) without a hitch has been very bullish for the future of Ethereum and, more specifically, the Ethereum Dev team

While they haven't accomplished everything that was originally listed as part of "ETH 2.0", they did get something done (eventually) which is more than some people (myself included) were expecting

In characteristically ETH fashion, the Dev team has released a roadmap spanning the next Odin knows how many years promising features that will be released in updates that all rhyme with "merge"

Sauce: https://twitter.com/FlobeeRants/status/1570382094366392320

Even when they're accomplishing things, everything is kind of still a joke

I'm not holding my breath but after the merge, I'm inclined to believe that sharding and some of these other features will eventually be added.

Bearish - Regulatory Environment

I like to analyze long term fundamentals so I'll be ignoring the likely short term price action that could be caused by the alleged 100 bip rate hike coming next week

From the bearish perspective, I think the biggest long term risk to Ethereum is the current regulatory environment

The tornado cash situation from a few months ago left the base Ethereum chain in a questionable position with regards to the largest US stakers having centralizing effects on the network (and obviously regulatory obligations to OFAC)

More recently Gary Gensler (chairman of the SEC) appeared before the Senate Banking Committee and had some choice words regarding which cryptocurrencies were and were not securities

It seems as though the Biden administration and the SEC might be using this proof of stake transition to target Ethereum, but I'll believe it when I see it

For more of my thoughts on the regulatory environment and the whole tornado cash situation check out the video down below

Feel free to write me back with questions or comments at rhett@rhett.blog I do my best to answer as many messages as I can.

Have a great week!